Tough action needed on ‘shabby deal’

The Competition Commission is investigating alleged “restrictive horizontal practices” relating to a deal between MultiChoice and the SABC. The Independent Communications Authority of South Africa (Icasa) said the parties entered into an agreement in July last year that the public broadcaster to launch a 24-hour news channel on MultiChoice’ DStv platform.

But the deal is also alleged to have contain an agreement in which the SABC is said to have agreed to transmit its free-to-air channels without encryption via the set-top boxes (STBs) needed for digital terrestrial transmission (DTT).

“In the context of the ongoing public dispute between e.tv and MultiChoice over whether free-to-air TV services should utilise set-top-box control, the question arises as to whether the agreement between the SABC and MultiChoice, as it affects the issue of set-top-box control, may constitute a form of restrictive horizontal practice in the television market,” Icasa said in a statement. It said the SABC and MultiChoice had both been asked to provide a copy of the agreement but that neither had honoured this request.

Icasa said MultiChoice had claimed “any contractual obligation upon the SABC to continue to transmit its free-to-air channels in the clear (i.e. without encryption) is an incident of the distribution arrangements agreed upon by the SABC and MultiChoice. Such obligation, as indicated forms part of an agreement between parties in a vertical relationship and is not, as alleged, a horizontal restrictive practice”. But Icasa said the failure to provide the agreement has made it difficult for the Authority to verify MultiChoice’s claim.

“MultiChoice and SABC’s refusal to supply Icasa with the agreement is shameful and shows they believe it will not stand up to public scrutiny,” said Democratic Alliance communications spokesperson, Marian Shinn. “They cannot hide behind the smokescreen of confidentiality of a business deal – the SABC is a state-owned entity and public broadcaster, so its operations should be open to public scrutiny.”

Sekoetlane Phamodi, co-ordinator for the civil society broadcasting NGO, the SOS Coalition, said the request for an investigation was an “impressive move” by Icasa. Phamodi said in the past, Icasa had been “ineffectual in ensuring that the broadcasting environment is competitive and offers end-users (us) real choice and real access to a truly diverse range of broadcast television services”.

Shinn also welcomed the move by Icasa. “It’s not only the issue of SABC’s decision to go the open-access route with the STBs, in defiance at that stage of government policy, but the entire relationship between SABC and MultiChoice, and the terms of the deal which basically ‘gives away’ the SABC archives to MultiChoice,” she told The Media Online.

“I tried repeatedly through the portfolio committee to get the SABC and the minister to come before us to explain the terms of the deal and the reason for it, but was defeated by a vote in committee in which the ANC members held the majority. I tried three times to get this issue before the committee but the chair ignored it or insisted on a vote. My understanding is that [communications minister] Carrim was open to the idea of discussing it with the committee (it was signed before he came into office) but needed an invitation from our chairperson, which was never forthcoming,” she said.

Phamodi confirmed SOS was investigating the deal too, and outlined the issues the NGO sees as being problematic. “What we’ve done is begun investigating what is possible in terms of preventing what is:

An effective sale of, what is by law, a running public channel and future public channel to a pay-TV operator to the exclusion of the majority of people;

An effective sale of SABC archives, which are national assets that belong to everybody, by way of giving MultiChoice a veto right over the sharing of such archives with other broadcasters;

Effectively forcing the SABC into a position where it has to adopt a particular kind of policy position in order to launch channels that can benefit both itself and the public.

“We need to ask ourselves and the parties concerned: in whose interests is MultiChoice really operating by requiring this of the SABC? Why is MultiChoice, which operates on its own satellite platform, so invested in what happens on and with terrestrial platforms? As a commercial entity, it certainly cannot be principally led by its commitment to people so much as it is to its commitment to the bottom line,” Phamodi said.

Shinn said there are clauses in the agreement that give MultiChoice first refusal on SABC generated material and key national events that are the SABC’s exclusive preserve to cover. “This should be open to all broadcasters on an equal, non-exclusive basis, as they are matters of national importance,” she said.

Phamodi said Icasa had done well in asking the Competition Commission to investigate. “We are pleased to finally see our regulator showing that it wants to be a champion for the people and we will support it all the way. We simply cannot allow our public broadcaster to be sold off to the highest bidder in this way and we look to Icasa and the Competition Commission to ensure that it isn’t.”

Shinn said she hoped Icasa would “use its recently acquired backbone to take the appropriate tough action to expose this shabby deal for what it is”.

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